Bill Gross, the founder of Pacific Investment Management Co. (Pimco), who is known in the markets as the "Bond King" and who made dollars from the credit rally that took place last year by successfully planning the potential of the tight monetary policy of the US Federal Reserve (Fed), has now been on the far side of the United States (USA).
In a post on his X account, Gross said that 10-year loans in the US are "expensive" at a yield of 4 percent, and that 1.8 percent TIPS with the same maturity would be a better choice if borrowing is absolutely necessary. In a second post, Gross expanded on the healthier way to invest in short-term loans for those interested in the market, saying, "Stick to the return to a positive 10-year/2-year yield curve. While you wait, 'carry' provides the gain," he wrote.
The yield on US 10-year loans is about 35 basis points below the 2-year yield. The yield curve has inverted since July 2022 in what some economists interpret as a reaction signal.
